Mortgage Archives

US economy wows with 256,000 jobs added in December, more than expected

January 10, 2025
The U.S. economy added 256,000 jobs in December, roughly 100,000 jobs more than expected. The unemployment rate ticked down to 4.1% from November’s 4.2%.

December’s jobs figure was even higher than November’s 212,000, which experts said was skewed higher by people returning to work from strikes and hurricanes.

December’s Labor Department’s report appeared to be buoyed by a 72,000-job swing in retail trade.

In December, retail trade added 43,000 jobs, while it lost 29,000 jobs in November. Health care, government and social assistance, along with leisure and hospitality, all saw double-digit gains as well.

While the country saw a rise in unemployment earlier in 2024, the Bureau of Labor Statistics said the unemployment rate has held steady at 4.1% or 4.2% for the past seven months.

“I continue to believe that the U.S. economy is on a solid footing,” Federal Reserve Governor Christopher Waller said earlier this week. “I have seen nothing in the data or forecasts that suggests the labor market will dramatically weaken over coming months.”

Labor market weakness is what triggered the Federal Reserve to start cutting its benchmark interest rate in September, even as progress on inflation stalled. After a jumbo-sized 50-basis-point cut, the Fed made two more 25-basis-point cuts to close out the year, dropping the federal funds target range to 4.25% to 4.5%, a full percentage point below its 2024 peak.

However, as the labor market showed renewed resilience, inflation started to rise. Consumer prices rose 2.7% for the year ending in November, after rising 2.6% in October and 2.4% in September.

“This minimal further progress has led to calls to slow or stop reducing the policy rate,” Waller said Wednesday, Jan. 8. “However, I believe that inflation will continue to make progress toward our 2% goal over the medium term and that further reductions will be appropriate.”

In December, the Fed released its latest economic projections, which forecast just two cuts in 2025, down from the previous forecast of four. In response, interest rate expectations rose.

This week, the average rate of a 30-year mortgage hit 6.93%, the highest level since July, and nearly a full percentage point higher than when the Fed started cutting its rate in September.

Why are mortgage rates going up while the Fed is cutting rates? Watch this video.

On Thursday, Jan. 9, the probability market had the Fed holding rates steady until June. It was split on whether the Fed would do a second cut in December or hold steady at one cut for the year.

Minutes released this week from the Fed’s last meeting revealed added concern about inflation. Without naming President-elect Donald Trump or his tariff and immigration policies, the Federal Open Market Committee multiple times brought up the unknown impact those policies might have on the economy.

“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes read. “As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy.”
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CFPB sues Warren Buffett-backed mortgage lender for ignoring ‘red flags’

January 8, 2025
The Consumer Financial Protection Bureau filed a lawsuit against a mortgage lender owned by Warren Buffett’s Berkshire Hathaway. The watchdog alleges Vanderbilt Mortgage and Finance steered customers to buy manufactured homes they couldn’t afford.

Vanderbilt Mortgage and Finance is a subsidiary of Clayton Homes, the nation’s largest builder of manufactured homes. Clayton Homes is a subsidiary of Berkshire Hathaway.

“Vanderbilt knowingly traps people in risky loans in order to close the deal on selling a manufactured home,” CFPB Director Rohit Chopra said in a statement.

The lawsuit said underwriters “ignored clear and obvious red flags” that certain customers would not be able to repay their loans.

“The CFPB’s lawsuit is unfounded and untrue, and is the latest example of politically motivated, regulatory overreach,” Vanderbilt said in a statement to Straight Arrow News. “Vanderbilt Mortgage’s underwriting processes exceed the legal requirements for assessing a borrower’s ability to repay loans by considering both monthly debt-to-income ratio and residual income, while the law only requires the use of one or the other.”

“The core allegation is that Vanderbilt is using an estimate of other expenses that is too low,” said Howard Beales, formerly the director of the Federal Trade Commission’s Bureau of Consumer Protection. “Now, according to the complaint, they only use that estimate when the consumer says either they have no expenses, which is unlikely, or when Vanderbilt’s estimate is higher than what the consumer reported.”

In the lawsuit, the agency details troubled lending situations to make its case. In one instance, CFPB said Vanderbilt approved a loan to co-applicants with 33 debts in collection, insufficient assets to pay those debts and two young children. CFPB said Vanderbilt assumed unreasonably low monthly living expenses. The borrowers fell behind on payments eight months after getting their mortgage.

Vanderbilt claims CFPB looked at tens of thousands of loans and identified “less than 0.8 percent” that may have raised flags. CFPB did not detail a percentage in its lawsuit.

“I didn’t see anything in the complaint that would have led me to bring this case,” said Beales, who now serves as professor emeritus of Strategic Management and Public Policy at George Washington University. “Bad actors have much higher rates of bad loans than that. Default rates in the subprime mortgage crisis were 20% and 30%, 0.8% is nothing.”

Manufactured homes accounted for around 11% of new home builds in 2022, according to the Manufactured Housing Institute, a trade group in the space. The average household income for buyers was $35,000, while the average price of a manufactured home was just over $127,000, not accounting for the price of the lot it sits on.

“The population that’s interested in buying manufactured housing is likely to be lower income and higher risk than the population of people who buy stick-built houses, and that’s going to lead to higher interest rates simply because of the credit risk,” Beales said. “And in fact, the essence of the CFPB charge here seems to be these loans were too cheap. They should have charged more or not made them at all.”

Clayton Homes and Vanderbilt previously received negative attention for lending practices in 2015. A report from The Seattle Times found the company targeted minority customers and charged them higher interest rates than similarly qualified white borrowers.

At that time, Buffett said he wasn’t going to make any apologies for the manufactured home’s lending practices.

“Clayton follows a pattern that actually is exemplary and rather extraordinary,” Buffett said in 2015. “We have no interest in selling anybody a house and having the mortgage default because it is a net loss to us, is a net loss to the customer.”

In 2016, a group of Democratic lawmakers wrote a letter to then-Attorney General Loretta Lynch and then-CFPB Director Richard Cordray asking their respective agencies to investigate Clayton Homes’ lending practices.

In this current lawsuit, CFPB is asking the court to stop Vanderbilt from making allegedly bad loans and pay civil penalties.
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Why mortgage rates are going up while the Fed is cutting rates

January 7, 2025
Prospective home buyers who thought the Federal Reserve’s rate-cutting cycle would relieve high mortgage rates were in for a rude awakening in 2024. Since the date of the Fed’s first cut in September, the rate on a 30-year fixed mortgage has gone up nearly a full percentage point, even though the Fed has cut two more times since then.

The average 30-year fixed mortgage rate started 2025 at 6.91%, up from 6.09% when the Fed first cut in September, according to Freddie Mac.

“People have been saying, ‘Look, I’ll wait until the Fed cuts interest rates and then I’ll get a better mortgage rate. And we’ve seen exactly the opposite,” Bright MLS Chief Economist Lisa Sturtevant told Straight Arrow News.

Sturtevant said a key reason for this phenomenon is the mortgage market is reacting to expectations as opposed to actions.

“Mortgage rates had been following from the beginning of July all the way through the rate cut in September – the Fed had been telegraphing that they were going to do that rate cut in September – so it was already baked in,” she explained.

I think we are in a new normal where the mid-sixes is going to be a good mortgage rate.
Lisa Sturtevant, Bright MLS Chief Economist

But although the Fed would proceed to cut rates two more times before the end of the year, the committee signaled in December that they were less optimistic about the inflation track in 2025. They downgraded their forecast from four cuts in 2025 to just two.

“So mortgage rates rose on account of that information, as opposed to the rate cut itself,” Sturtevant said.

While many homeowners jumped on the opportunity to lock in a rate of around 6% in September, many more missed the boat. Sturtevant said those homeowner hopefuls will be ready to act quickly with any downward movement. But will rates only rise from here?

“I don’t think we’re going to get to 8% for sure,” Sturtevant said, responding to reports warning of that possibility. “I think we are in a new normal where the mid-sixes is going to be a good mortgage rate. And for some people, that’s hard to swallow, since during the pandemic, we saw rates down around 3%.

“But actually, over the last 50 years, the average rate on a 30-year fixed has been about 7.5%,” she continued. “So we’re not high by historical standards. We’re just high by what people had come to expect during the pandemic.”

The average 30-year fixed mortgage rate bottomed out at around 2.65% in January 2021. The post-pandemic peak hit 7.79% in October 2023.

Mortgage rates are more closely tied to the 10-year Treasury, which is a more reliable indicator to consider when predicting where mortgage rates are heading.

“We spent a lot of time wringing our hands and thinking about what the Federal Reserve is going to do, but the Fed is reacting to economic data, and that is what we should be looking at when we want to think about where mortgage rates are headed,” Sturtevant said.

Sturtevant recommended paying attention to the 10-year Treasury, inflation, the labor market and consumer confidence.
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Biden administration bans medical debt from credit reports

January 7, 2025
With less than two weeks left until President Joe Biden leaves office, his administration announced a new rule Tuesday, Jan. 7, that could lift the credit scores of millions of Americans. The finalized rule will not only stop medical debt from being included on credit reports, it will also ban lenders from using certain medical information in loan decisions.

The rule comes despite objections from the banking and consumer data industries and will eliminate an estimated $49 billion in medical bills from the credit reports of about 15 million Americans, according to the Consumer Financial Protection Bureau.

The rule also bans lenders from using medical devices like wheelchairs or prosthetic limbs as collateral for loans and bars lenders from repossessing the devices if patients aren’t able to repay the loans.

Lenders will still be able to consider medical information in certain situations, like when the loan would be used to pay health expenses or if a person asks for a temporary postponement of loan payments for medical reasons.

Today, the CFPB finalized a rule that will remove an estimated $49 billion in medical bills remaining on the credit reports of about 15 million Americans.https://t.co/PeCoLAeQSH
— consumerfinance.gov (@CFPB) January 7, 2025

The CFPB says the measure will boost the credit scores of people with medical debt by 20 points on average. It’s also expected to lead to the approval of 22,000 additional mortgages a year.

The rule would take effect 60 days after it’s published in the federal register. However, the incoming Trump administration could undo the new rule because Congress has the opportunity to review and rescind final rules. President-elect Donald Trump is set to be inaugurated on Jan. 20.
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The average home buyer is 56 years old as first-time buyers fall to historic lows

November 5, 2024
First-time home buyers make up the smallest portion of home purchases since the National Association of Realtors (NAR) started tracking the statistic in 1981. At the same time, the age of buyers is on the rise.

First-time buyers dropped to 24% between July 2023 and June 2024. That’s down from 32% a year earlier, according to NAR’s 2024 profile of home buyers and sellers.

“First-time buyers face high home prices, high mortgage interest rates and limited inventory, making them a decade older with significantly higher incomes than previous generations of buyers,” NAR Deputy Chief Economist Jessica Lautz wrote.

The average age of first-time buyers rose to 38 years old from 35 years old. The average age of repeat home buyers reached 61 years old, up from 58 years old. The overall average of all home buyers was 56 years old, up from 49 years old the previous year.

The median household income for those first-timers is $97,000, an increase of $26,000 in the past two years. Without previous home equity to rely on, their down payments average 9%. While well below the golden 20% goal, it’s the highest down payment for first-time buyers since 1997.

Sixty-nine percent of first-time buyers relied on savings for down payments, 25% received loans from friends and family, 21% cashed out financial assets and an all-time high of 7% used inheritance money to close the deal.

Repeat home buyers, however, have more cash to work with, according to Lautz.

“Current homeowners can more easily make housing trades using built-up housing equity for cash purchases or large down payments on dream homes,” Lautz said.

The median income for repeat home buyers is up to $114,300 and their down payments reached 23%. That’s the highest recorded since 2003. According to NAR, 26% of all buyers paid cash for their home purchases.

As homes get increasingly expensive, NAR says 17% of home buyers are housing multiple generations. Thirty-six percent say they made the move to save money, 25% are entering the multi-generational fray to take care of aging parents, 21% have children over the age of 18 moving back in, and 20% have kids over 18 who never left.

However, the environment is getting more advantageous for prospective buyers. As mortgage rates have been falling, housing inventory hit its highest point in five years, according to Realtor.com.

There are a lot of reasons to sell, according to NAR. Twenty-three percent of sellers said they wanted to move closer to family, 12% sold because their home was too small, while 11% said their current residence was too big. Ten percent said their neighborhood conditions were deteriorating and wanted to move somewhere else.
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Zillow adds climate-risk tool to listings, researchers weigh in on viability

October 16, 2024
The recent hurricanes in Florida have some people thinking about the possible threats extreme weather can have on their homes. In addition, recent numbers show climate risks have become a critical consideration in buying homes, which led to Zillow launching a climate-risk tool. But, how reliable is the new tool?

The real estate website teamed up with First Street, a climate risk financial modeling company, to create an interactive platform that gives insight into hazards from floods, wildfires, wind, heat and air quality.

It shows the risk percentages estimated 15 years and 30 years into the future, the standard lengths of time for fixed-rate mortgages.

A September 2023 Zillow survey found that 83% of people considered climate risks when looking at homes. But, according to Heatmap News, there are a few things to keep in mind when using Zillow’s tool.

Climate-risk tool tips

A Bloomberg investigation found tools like First Street may be questionable because different climate risk models could give very different estimates for the same property.

One tip is to use Zillow’s flood risk assessment as a starting place, but contact the local government to learn more. That’s because the ability to figure out whether a house will flood depends on knowing the local infrastructure including stormwater drains, which does not exist on climate risk models.

Climate experts said to take it seriously if Zillow lists that a property flooded recently, because that data is typically reliable and should be a red flag.

Another note from researchers is that Zillow’s tool will likely underestimate a home’s wildfire risk, especially in the Western U.S. That’s because computer models that estimate wildfire risk are in an early stage of development.

Also, when assessing whether a home faces wildfire or flood risk, a buyer should factor in the whole neighborhood. That includes considering whether the roads would still be drivable if power lines fell, which is not detected on Zillow’s tool.

Main takeaway

Overall, the experts cited by Heatmap News said using climate-risk tools like this can be helpful, but to do your own research, too.

Some believe community officials should be investing in climate-risk tools, so it’s not only up to the consumer to look for data.

For example, the state of California invested in a public wildfire catastrophe model so it can figure out which homes and towns face the highest risk.
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Surging insurance costs threaten to erode Florida’s home values

October 9, 2024
The state of Florida is bracing for Hurricane Milton’s wrath less than two weeks after Hurricane Helene battered the Gulf Coast. The back-to-back hurricanes are a devastating reminder that 1 in 3 Florida homes is susceptible to storm surge flooding from hurricanes, according to Guidewire.

As homeowners pick up the pieces of their lives, another storm rears its head, one that is set to ravage a much larger portion of the state. Because of storms like these, Florida is the most expensive state in the country for home insurance.

“We’ve always pitched ourselves as an affordable place to live, and from a tax perspective, it is,” Chuck Nyce, a professor of risk management and insurance at Florida State University, said. “But I would argue today in Florida that this is something that people need to be aware of: insurance costs are high.“

The average annual cost of home insurance in Florida neared $11,000 in 2023. Insurify projects it will climb to $11,759 by the end of the year. That cost does not include flood insurance, which typically requires a separate policy.

“When you’re talking about spending $10,000 or $15,000 a year for homeowners insurance coverage, $1,000 a month or more, that is part of your mortgage payment,” Nyce said. “And that has to be a cost that’s factored into the cost of living here.”

While property insurance’s share of the average mortgage payment is going up nationwide, in places like Miami, that burden is twice as big.

For single-family homes that include insurance in escrow, ICE Mortgage Monitor said the national average share is around 9.4%, while the property insurance share in Miami is 19%. That is second only to New Orleans, Louisiana, at 25%.

“A lot of research is suggesting that both the risk and the rising insurance premiums are depressing home prices compared to what it would be,” said Shan Ge, an assistant professor of finance at NYU Stern School of Business.

Ge has been researching insurance trends for years. Her published research shows when insurance rates go up, two things happen: homeowners buy less coverage and home values go down.

“And this drop in home values is pretty dramatic,” Ge said. “Buyers are going to be willing to pay less for property compared to a world where Florida does not face climate risk, does not face all these disasters, and does not face these increasing insurance premiums.”

Ge told Straight Arrow News she hopes developers will take her research into account in Florida and elsewhere.

“When they see these prices not as high as they would be in this counterfactual world, we’re hoping that will slow down the development and discourage more people from moving into risky places,” Ge said.

In August 2024, the median sales price of a single-family home in Florida dropped from a year ago for the first time in at least five years, according to data from Florida Realtors. For condos, which face not only higher insurance costs but mandatory maintenance needs, August marked the second month of annual price declines.

So far, insurance premiums at a premium have not deterred the rampant migration to the Sunshine State, but it may influence who can afford to come in and who may be forced to leave.

“Insurance prices risk, and if you can’t afford to live there, you shouldn’t move there,” Nyce said. “So it’s a really difficult problem. I always tell people, ‘I can’t afford to live in Monaco, and I can’t afford to drive a Bugatti, but I know that.’ It’s much more difficult to tell someone who’s maybe lived somewhere for generations that you can’t afford to live there anymore.”
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Does Fed rate cut plus falling mortgage rates equal more affordable housing?

September 20, 2024
Falling interest rates may pique the interest of prospective homebuyers but experts don’t necessarily think it is going to loosen the market anytime soon. The rate for a 30-year fixed mortgage averaged 6.09% for the week, according to Freddie Mac. The dip comes as the Federal Reserve cut its benchmark interest rate by 50 basis points on Wednesday, Sept. 18.

Mortgage rates have been slowly declining since hitting a 23-year high of 7.79% in October 2023. Though rates may still seem pretty high, every percentage point makes an impact. For every one percentage point mortgage rates increase, buying power lowers by 10%.

At the same time rising mortgage rates decreased buying power, housing prices skyrocketed. Even with recently falling mortgage rates in anticipation of the Fed cutting its key rate, the housing market has barely budged.

Existing home sales fell 2.5% in August, according to a release from the National Association of Realtors.

What do further rate cuts mean for prospective buyers and sellers? Straight Arrow News interviewed Selma Hepp, chief economist at CoreLogic.

This transcript has been edited for length and clarity. Watch the full interview in the video above.

Simone Del Rosario: Homeowner hopefuls have been putting off plans to buy for years. Are these lower rates going to be the entrance point they’re looking for?

Selma Hepp: I think the lower mortgage rates are certainly helping. Every time we saw mortgage rates come down, it did help spur some buyer demand. For example, when you think about what happened after the Fed meeting last December, mortgage rates came down. That certainly spurred housing market demand; same thing the year prior.

So whenever we move closer to 6% and further away from 7% and even come down to the 5% range, it does help with affordability. It helps with a buyer’s budget and it brings back that demand that we desperately have been needing in the housing market.

Simone Del Rosario: Is it possible that more affordable mortgage rates could actually drive up housing prices since more buyers would be trying to enter the market?

Selma Hepp: Yeah, that’s a question that keeps coming up because everybody’s worried that there’s so much pent up demand and not enough supply, meaning that as soon as mortgage rates come down, you’ll see more buyers coming in and pushing those prices higher. That’s certainly a possibility, but what we did see over the course of this year is more inventory of existing homes for sale, and that has helped put a lid on home price appreciation.

And the other thing is, when you think about mortgage rates further coming down, it’s going to unlock some of that inventory that’s been locked in because the difference was so high between where people locked in and where mortgage rates were.

So with that spread coming lower, I think we’re going to see unlocking of some of that inventory, so the balance between buyers and sellers is going to be better, and it’s going to keep the lid again on the rate of home price appreciation. So we certainly hope for that going forward.

Simone Del Rosario: For sellers looking at the market right now, when would be an optimal time for sellers to enter the market?

Selma Hepp: That’s usually very individual decision. It depends on how long you’ve owned the home. Are you moving to another place where home prices are more affordable or not; are you staying in the area? And it depends also, on what your family situation is.

A lot of time sellers are driven by a change in family status. So they are either selling because they need a bigger home or there is a divorce situation, or maybe somebody is no longer around, and so that’s usually what drives sales.

That’s the most frequent reason for sales, but sometimes lower mortgage rates are helping. They do help sellers sort of feel better about their next purchase because it’s more affordable again. And I think definitely with mortgage rates coming down, it’s going to help with that sense of, ‘How much am I giving up to buy my new home?’ So yeah, I think it will help the number of sellers in the market as well.

Simone Del Rosario: Yes, selling a home is an individual decision and has to do with your personal life. But what we’ve seen over the past couple of years is people holding onto their low interest mortgage rates and not moving on to the next home when they typically would.

So this could unleash sellers, but at the same time, I believe the sellers would want to have the best price they can get for their house since they’ve waited so long to be able to sell it.

Selma Hepp: That’s often an interesting dilemma because you want the most you can get for your home, but then you also think about, with next home that you’re purchasing, that next seller is gonna want for the most for their home as well.

That’s always a dilemma that sellers find themselves in, but you’re absolutely right in terms of length of tenure for sellers. Over the course of the last couple of decades, we’ve seen people staying in their home longer and longer because homes have become increasingly more unaffordable and there are fewer homes available for sale.

So oftentimes what I hear sellers say is, ‘I do want to sell. I do want to move, but where am I going to move? There’s no inventory. There’s not something that fits what I’m looking for.’ And so they just end up staying put.

Simone Del Rosario: Obviously, these mortgage rates have been a large part of people’s decision-making process. But as you just pointed out, that’s not the only thing that is stalling the housing market. What are the other things that are making the housing market more sticky?

Selma Hepp: Affordability is the biggest one. But affordability, the lack of affordability, comes from the fact that we’ve under built for so long, particularly first-time or entry-level homes. So when people are trying to think about their first home or thinking about moving to another home, there are fewer homes to choose from. So that’s holding people back a lot.

We definitely saw that. For example, mortgage rates came down in early spring of 2023 and we saw a burst of buyers coming into the market, but there were not enough homes for sale. And that’s when home prices surged again and we saw significantly more appreciation in the market because of that imbalance.
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Markets are betting on a supersized rate cut. Why the Fed may disappoint.

September 17, 2024
Markets are increasingly betting the Federal Reserve will make a supersized rate cut at this week’s meeting. There are two camps: Those who believe the Fed will cut interest rates by 25 basis points and those who believe the Fed will double up to 50 basis points.

A week ago, 2 out of 3 futures traders were betting the Fed would do a 25 basis point cut, according to CME FedWatch.

But by the time the Fed started its two-day meeting the morning of Tuesday, Sept. 17, odds had switched. As of 10 a.m. ET, 2 out of 3 futures traders were betting on a jumbo cut to kick off this rate-cut cycle.

“The market is thinking this because the market is sniffing out some economic weakness,” Fed Guy and CIO of Monetary Macro Joseph Wang told Straight Arrow News. “They’re noticing that the unemployment rate has gone up. It seems like there are a lot of indicators that the Fed might be over-tightening, and so in order to get ahead of this, the Fed might want to do with a supersized cut. Now I’m not in that camp, because so far, what I hear from Fed speakers is that it’s more likely that the economy is normalizing.”

Wang is in the 25-basis-point camp, joined by former Fed adviser and QI Research CEO Danielle DiMartino Booth.

“They want to be measured and gradual,” DiMartino Booth told Straight Arrow News. “They want to be Greenspan-esque. [Former Fed Chair Alan] Greenspan had 17 25-basis-point rate hikes in a row. So it was a little bit different dynamic. It was a tightening campaign, but they want to be as measured. They want to be able to say, ‘We’re going to engineer a soft landing. We’re going to be taking interest rates down at a very slow pace.’”

When inflation started getting out of hand in 2022, the Fed began its rate-hike campaign to tighten monetary conditions and get people and businesses to spend less. It hoped the move would bring down prices.

The team hiked the Fed funds target range all the way to 5.5%. They’ve held it there for more than a year now. This is the highest the rate has been since early 2001.

But now inflation is much closer to the Fed’s 2% target, the unemployment rate is rising. Therefore, a soft landing is getting more elusive.

Markets are betting that the Fed funds rate will go down to below 3% by next summer. That would mean cutting 250 basis points in less than a year.

“The pricing in the market seems to be pretty aggressive,” Wang said. “From my perspective, I think there’s too much doom and gloom being priced in. My base case expectation is that rather than having a series of huge cuts that the market is assuming that we have, some steady 25 basis point cuts, and maybe the cut cycle ends, let’s say around 3.5%, rather than below 3%.”

Wherever it lands, Americans will see a change in what it costs to borrow money. In the same way as when the Fed was hiking rates and mortgage rates, auto loans and credit card interest rates soared, this time those interest rates will also go down.

In fact, it’s already happening. Ahead of Wednesday’s Fed cut, mortgage rates fell to levels not seen since early 2023. If the Fed cuts rates by 25 basis points following its meeting, that cut is likely priced into the current mortgage rates. But if they go jumbo-sized to 50 basis points, mortgage rates could go down even more.

Subscribe to the Straight Arrow News YouTube page and tune in Wednesday, Sept. 18, at 2:10 p.m. ET, where SAN will have a live report of the Fed’s final decision and comments from Fed Chair Jerome Powell.
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Home sales in July picked up after 4 months in a market slump

August 22, 2024
After a four-month slump, sales of previously occupied homes finally picked up in July. Lower mortgage rates and a rising number of homes on the market appear to have encouraged more home shoppers to make a move.

Despite the news, the increased supply of homes did not help cool home prices. Sales are still down 2.5% from this time last year. Although numbers came in slightly above expectations from economists, the market remains cautious.

Home prices have been steadily increasing for 13 consecutive months. The national median sales price climbed by 4% from last year, reaching over $400,000 in July.

The National Association of Realtors’ chief economist said while sales are still sluggish, consumers are seeing more options. Affordability is improved thanks to lower mortgage rates, and inventory is on the rise. There were 1.33 million unsold homes at the end of July.

The U.S. housing market has faced some serious challenges since mortgage rates began to climb in 2022. Last year, existing home sales plunged to their lowest level in nearly three decades, with mortgage rates hitting a 23-year high of 7.79%.

But there may be some relief on the horizon for prospective buyers. Mortgage rates have been easing recently, with the average 30-year home loan now sitting at around 6.5%. With inflation showing signs of cooling and signs of a softer job market, there’s speculation that the Federal Reserve may cut its benchmark interest rate for the first time in four years as early as next month.
Related Stories

US economy wows with 256,000 jobs added in December, more than expected

CFPB sues Warren Buffett-backed mortgage lender for ignoring ‘red flags’

Why mortgage rates are going up while the Fed is cutting rates

Biden administration bans medical debt from credit reports

The average home buyer is 56 years old as first-time buyers fall to historic lows

Zillow adds climate-risk tool to listings, researchers weigh in on viability

Climate-risk tool tips

Main takeaway

Surging insurance costs threaten to erode Florida’s home values

Does Fed rate cut plus falling mortgage rates equal more affordable housing?

Markets are betting on a supersized rate cut. Why the Fed may disappoint.

Home sales in July picked up after 4 months in a market slump

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